Silver Prices Surge As Reddit GameStop Traders Switch Focus

The value of silver has surged following a call from the Reddit group behind the GameStop boom.

Reddit's r/WallStreetBets forum urged people to invest in the metal, and silver prices subsequently leapt to a five-month high, with prices rising by seven percent to $28.99 (£21.13) an ounce.

It's the latest development in an unprecedented attack on big banks by small-time traders.

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The story began when forum members noticed that hedge funds in the US were 'shorting' companies like GameStop - essentially betting on their failure.

Users then began buying up shares in these companies, which forced the price up, causing the hedge funds on Wall Street to lose billions and billions of dollars.

Summarising the cause, one Reddit user posted: "Think about the Gainz. If you don't care about the gains, think about the banks like JP MORGAN you'd be destroying along the way."

A big difference this time around is that silver has been growing in value, whereas GameStop was running at a loss.

Kyle Rodda, an analyst at brokerage IG Markets in Melbourne, told the BBC: "There is this curious situation now where the Reddit crowd has turned its sights on a bigger whale in terms of trying to catalyse something of a short squeeze in the silver market.

"There's a lot of commentary on these platforms to pile in to the miners."

Ross Norman, a veteran precious metals trader, told the Financial Times: "It's a fools' errand, it's financial anarchy; somebody is going to get hurt."

Jordan Belfort - aka the Wolf of Wall Street - praised those who have managed to make some money out of the 'short squeeze', but said they shouldn't get ahead of themselves.

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Speaking to Sky News, the 58-year-old said it was nice to see the little guy win for a change.

He said: "It's shocking, really amazing, and gratifying to see a little bit of the pain going on the side of the hedge funds.

"The hedge funds have been beating up little investors since the beginning of time pretty much."

He added: "While this will be short-lived... everyone's got to be really careful because it's going to be like catching a falling knife when it unravels.

"The danger is that Wall Street and hedge funds especially are experts at identifying what we call 'inefficiencies in the market'.

"This is an inefficiency in the market right now and they will look to close that inefficiency very quickly."

Topics: World News, Reddit

Jake Massey

Jake Massey is a journalist at LADbible. He graduated from Newcastle University, where he learnt a bit about media and a lot about living without heating. After spending a few years in Australia and New Zealand, Jake secured a role at an obscure radio station in Norwich, inadvertently becoming a real-life Alan Partridge in the process. From there, Jake became a reporter at the Eastern Daily Press. Jake enjoys playing football, listening to music and writing about himself in the third person.

@jakesmassey